WPI inflation spikes to 1.62% in June vs 0.79 % in May

Accelerating for third straight month, India’s main inflation gauge based on monthly wholesale price index (WPI) spiked to 1.62 percent for the month of June, 2016, almost double as compared to 0.79 percent for the previous month and (-) 2.13 percent during the corresponding month of the previous year, driven by increases in food articles, minerals as well as fuel & power, apart from the base effect.

Meanwhile, the buildup inflation rate in the financial year so far was 3.82 percent compared to a build up rate of 1.70 percent in the corresponding period of the previous year. As per the data released by the Ministry of Commerce & Industry, the WPI for ‘All Commodities’ (Base: 2004-05=100) for the month of June, 2016 rose by 1.4 percent to 182.0 (provisional) from 179.4 (provisional) for the previous month.

Component wise, primary articles index, having weight of 20.12 percent rose by 2.9 percent to 262.8 (provisional) from 255.3 (provisional) for the previous month. In the primary article index, the index for 'Food Articles' group rose by 2.9 percent to 279.0 (provisional) from 271.1 (provisional) for the previous month. The index for 'Non-Food Articles' group rose by 2.1 percent to 231.2 (provisional) from 226.4 (provisional) for the previous month. The index for 'Minerals' group rose by 6.9 percent to 199.0 (provisional) from 186.2 (provisional) for the previous month.

Fuel & Power index having weight of 14.91% rose by 3.4 percent to 186.5 (provisional) from 180.3 (provisional) for the previous month.

Manufactured Products constituting the major portion of the index with weightage of 64.97 percent rose by 0.2 percent to 156.0 (provisional) from 155.7 (provisional) for the previous month. The index for 'Food Products' group rose by 0.9 percent to 186.9 (provisional) from 185.3 (provisional) for the previous month. The index for 'Beverages, Tobacco & Tobacco Products' group rose by 0.8 percent to 220.7 (provisional) from 219.0 (provisional) for the previous month. The index for 'Textiles' group rose by 0.2 percent to 140.9 (provisional) from 140.6 (provisional) for the previous month. The index for 'Paper & Paper Products' group rose by 0.3 percent to 155.9 (provisional) from 155.4 (provisional) for the previous month. The index for 'Rubber & Plastic Products' group rose by 0.1 percent to 146.1 (provisional) from 146.0 (provisional) for the previous month. The index for 'Chemicals & Chemical Products' group rose by 0.5 percent to 150.9 (provisional) from 150.1 (provisional) for the previous month. The index for ' Transport, Equipment & Parts ' group rose by  0.1  percent to 139.4 (provisional) from 139.3 (provisional) for the previous month.

Meanwhile, the index for 'Machinery & Machine Tools' group declined by 0.1 percent to 135.3 (provisional) fom 135.5 (provisional) for the previous month. The index for 'Basic Metals, Alloys & Metal Products' group declined by 0.6 percent to 153.9 (provisional) from 154.9 (provisional) for the previous month. The index for 'Non-Metallic Mineral Products' group declined by 0.6 percent to 177.7 (provisional) from 178.7 (provisional) for the previous month. The index for 'Leather & Leather Products' group declined by 0.1 percent to 145.5 (provisional) from 145.7 (provisional) for the previous month. The index for 'Wood & Wood Products' group declined by 0.2 percent to 196.6 (provisional) from 197.0 (provisional) for the previous month.

For the month of April, 2016, the final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 177.8 as compared to 177.0 (provisional) and annual rate of inflation based on final index stood at 0.79 percent as compared to 0.34 percent (provisional) respectively.

The hardening of the WPI index follows an uptick in retail inflation, announced earlier, which hit a 22-month high of 5.77 per cent in June, dampening chances of a rate cut by RBI at its next policy meet scheduled for August 9.